Business News

Ontario Tories would cut spending by 6 per cent; predict surplus in 2016

by
The Canadian Press | Story:
115170 -
May 15, 2014 / 7:34 am

TORONTO - The Progressive Conservatives laid out an aggressive plan Wednesday to slash program spending by six per cent â€” or $7.6 billion â€” over the next four years to kill Ontario's $12.5-billion deficit, but insist they'll still improve health care and education.

They're planning a modest surplus of $319 million in 2016-17, then keep spending in line with population growth â€” in effect promising no more red ink.

Voters will have to swallow some strong medicine if they want to see half a million more jobs created over the next eight years, said Tory Leader Tim Hudak.

"Look, we have some tough choices to make," he said.

"The next number of years are not going to be easy. Whenever you're in a hole when it comes to jobs or debt, it's going to be tough slogging. But the longer you postpone that, the deeper the hole gets, the tougher that job is."

On the chopping block are 100,000 jobs and any wage increases in the public sector, a 30 per cent tuition grant for college and university students and a tax credit of up to $1,500 a year for seniors who renovate their homes to make them more accessible.

They'd also get rid of the Ontario Clean Energy Benefit â€” which takes 10 per cent off hydro bills â€” and government grants for businesses, replacing them with a 30 per cent cut to corporate taxes.

The Tories plan to save money by eliminating 9,700 non-teaching staff, remove hard caps on class sizes and a requirement for one early childhood educator for every 26 children in full-day kindergarten, as well as freeze the Ontario Child Benefit.

But they'll raise targets for reading, writing and math, introduce a standardized test for Grade 8 science and aim to have kids spend 45 minutes of every school day doing physical activity.

Their platform also promises more use of specialized math teachers in Grades 4 to 6 and financial incentives to attract more math and science grads to teaching.

Only health-care spending won't be touched, they said, promising to expand the availability of home care and long-term care, allow specialty clinics to provide more services and let patients use their allotted health-care dollars to choose their own care provider.

To raise money for public transit and transportation infrastructure, the Tories said they'd sell off chunks of Crown corporations like the Liquor Control Board of Ontario, Hydro One and Ontario Power Generation to Canadian and Ontario pension plans.

The Tories are counting on the wage freeze to save the most money â€” about $2.1 billion a year. They also plan to review all government programs and cancel the ones that don't work to save about $1.2 billion over four years.

Asked whether he could still implement his ambitious plan if those workers resisted and went on strike, Hudak said he'd work with union leaders who wanted to help.

But he wasn't very conciliatory in his platform, saying he'd make labour leaders "transparent and open" with their financial information, like charities and corporations, and give union members the right to a secret ballot in certification votes.

Some of the promises were lifted directly from expert advice the governing Liberals paid for, but didn't adopt, including Don Drummond's 2012 austerity report.

The platform included a pledge to merge Ontario Works and the Ontario Disability Support Program to save money and look at ways to reduce administration costs, as recommended by another commission on reforming social assistance.

Nearly 20 years ago, former Tory leader Mike Harris rode to victory with a promise to slash government spending by 20 per cent â€” without touching health care â€” cut personal income taxes by 30 per cent, balance the budget and create more than 725,000 new jobs over five years.

It's still a controversial legacy in Ontario, with strikes and violent demonstrations marring Harris's rule.

Hudak's platform is a redux of the Common Sense Revolution, Premier Kathleen Wynne said in London, Ont.

"Cutting 100,000 jobs â€” that's more than twice the jobs that Mike Harris cut and we know what happened in those years," said the Liberal leader.

"We know how devastating that time was and Tim Hudak wants to go him one better."

The Tories are planning "aggressive" cuts, but Wynne's claim that it's a "recipe for recession" is exaggerated, said Mike Moffatt, an economist and professor at the Ivey Business School in London.

"I think in the short term there may be an economic hit," he said. "Not enough to throw the economy into a recession, but the economy's probably going to feel it."

The question is whether the Tories can pull it off, he said. Private sector jobs won't spring up overnight.

For example, companies that expand because they're paying less tax would need time to get money together and construct new facilities, Moffatt said.

But once all the hard work is done, Hudak said he'll reward voters by phasing in income tax cuts once the Tories are re-elected in 2018.

"We're aiming for 10 per cent, put more money in your pocket and your priorities and to say thank you for the sacrifice you make each and every day to get Ontario moving again," he said.

Hudak said he's not ashamed of his time in the Harris government.

"Look, if people want to judge me on being part of a government that led North American job creation, they can choose yay or nay," he said.

"But if you want to judge about what the next eight years are going to look like, look at my plan."

Canadian Mortgage rates are low and could be dropping down in time for the spring market following a drop in the Bank of Canada Rate on January 21 by 1/4% which will save new buyers and those with mo...

Have you ever had this happen to you? You are in the middle of your second or third good discussion with a prospect and everything seems to be going great. The prospect seems engaged and happy to work...